Bingham ConsultingNewsroom
Richard Cordray Recess-Appointed Director of Consumer Financial Protection Bureau
January 5, 2012 — Earlier today President Barack Obama recess-appointed Richard Cordray as the first director of the newly-formed Consumer Financial Protection Bureau (CFPB), authorized by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The president nominated Cordray in July 2011 for the position, but the Senate has not confirmed him. Today the president asserted the right to make a recess appointment, although there are likely to be challenges to the president’s interpretation of what constitutes a “recess” for purposes of exercising his appointment authority.
The appointment has significant substantive implications for financial services entities that are subject to enforcement and regulation by the CFPB. Without a director, concerns were raised as to whether the CFPB had the authority to promulgate rules and whether it could bring enforcement actions against non-bank financial institutions. Because of the legal uncertainty, the administration had neither authorized the promulgation of rules nor enforcement against non-bank financial institutions.
We anticipate that the CFPB will now move rapidly to promulgate rules and will also start enforcement actions as the agency has used the time since its inception in July 2011, to do the ground work underlying formal process.
Cordray is the former attorney general and treasurer of Ohio, clerked on the Supreme Court for Justice Kennedy and was the editor-in-chief of the University of Chicago Law Review.
This alert was authored by Nicholas M. Gess and Stephen E. Merrill.
Bingham Expands in Asia With Beijing Office Launch
Bingham announces the opening of a Beijing office with the addition of recognized international lawyer Xiaowei Ye as a partner and the transfer of Tokyo corporate partner Brian Beglin to Beijing. Ye and Beglin will serve as managing partners of the new office, Bingham’s third Asian location in addition to Tokyo and Hong Kong. Both are also principals in Bingham Consulting LLC, the firm’s affiliated business providing strategic and public policy advice on cross-border and multijurisdictional matters.
Incumbent State Attorneys General Re-Elected: Democratic Attorneys General Retain 26-24 Majority
Bingham Client Alert, Nov. 9, 2011
Attorneys General Jack Conway (D-Ky.), Buddy Caldwell (R-La.) and Jim Hood (D-Miss.) have been re-elected to four-year terms. Both Conway and Caldwell were re-elected to their second terms, while Hood was re-elected to his third term.
Kentucky: Conway (D) — 54.95 percent over P’Pool (R) — 45.05 percent
Louisiana: Caldwell (R) — Unopposed
Mississippi: Hood (D) — 61 percent over Simpson (R) — 39 percent (unofficial)
Read the full alert here, authored by Sarah Reznek, Nicholas M. Gess and Timothy J. Shea.
C. Cox Featured on the Cover of Thomson Reuters
Thomson Reuters Accelus Informer, Fall 2011 — Partner Chris Cox, former chairman of the Securities and Exchange Commission, was interviewed for a lengthy Thomson Reuters cover story. Cox discussed a variety of topics related to the Dodd-Frank Act, including how the SEC is positioned in the post-Dodd-Frank era, potential effects of the D.C. Appeals Court vacating Dodd-Frank’s proxy-access rule and ramifications of Dodd-Frank’s rules regarding executive compensation. Cox also opined on the current state of the SEC, including the agency’s involvement in global coordination and possible effects of political debates regarding the funding of regulatory agencies.
Read the full text of the interview here (email address required).
C. Cox Discusses Financial Market Regulation
Compliance Complete, August 2011 — Partner Chris Cox, former chairman of the Securities Exchange Commission, spoke with editors of Thomson Reuters Accelus on a broad range of issues facing financial market regulation. In response to the new Dodd-Frank regulations, Cox said, “Without a doubt, clients are most concerned about continued uncertainty, which affects many of their business decisions, their budgeting and, of course, their compliance approaches. As the rulemaking drags on, it is becoming increasingly clear that it will take years before the full impact of Dodd-Frank is understood.” He added that regulatory arbitrage is a serious risk that regulators have to take into account. “It requires increasing coordination among governments, both domestically and internationally. This is harder than it sounds, because there are also pressures on regulators in every country to follow their own path,” said Cox. “For instance, marketplace actors in Asia and Europe who are concerned with the extra expense that may be entailed in the approaches mandated by Dodd-Frank are encouraging their legislators and regulators to push back.”
As for the role of regulation in the wake of the financial crisis and its aftermath, Cox said one of the most important lessons learned from the crisis is the importance of investor confidence. “If the 100 million ordinary investors who own more than $10 trillion in equities and stock funds in U.S. markets come to believe that they are at an information disadvantage, confidence in our capital markets collapses, and along with it, the market itself,” he said. “One area where this will be particularly important going forward is in the improvement of disclosure given to investors in municipal securities. With the federal government’s own finances in such precarious shape, and state and local level governments suffering from their own pension, healthcare and related financial maladies, investors need to know more about what they own.”
President Nominates Former Ohio Attorney General Richard Cordray as Director of CFPB
Bingham Client Alert, July 18, 2011 — Earlier today, President Obama stated his intent to nominate Richard Cordray to serve as the first Director of the Consumer Financial Protection Bureau (CFPB). Cordray’s nomination will require confirmation by the United States Senate or a recess appointment by the President.
Cordray is currently the CFPB’s Director of Enforcement, a position which does not require Senate confirmation, and most recently served as the elected Attorney General of Ohio (D). He has previously served as Ohio’s Treasurer, a law professor and a U.S. Supreme Court clerk.
Cordray’s appointment is further evidence of the close collaboration expected between the newly-formed CFPB and the state Attorneys General and is consistent with the President’s Executive Order requiring federal agencies to collaborate and not seek to preempt state law enforcement without good cause.
The CFPB was formed as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and will be fully authorized and operational on July 21, 2011.
This alert was authored by Nicholas Gess and Sarah Reznek.
Cox Discusses Challenges Facing Dodd-Frank
CNBC, July 18, 2011 — The Dodd-Frank financial oversight law is facing significant challenges, with U.S. regulators months behind schedule in rulemaking and persistent calls for repeal of the law or significant revisions. But with Democrats in control of the upper chamber of Congress and President Barack Obama able to defend Dodd-Frank with his veto pen, efforts by Republicans to substantially scale back the law seem unlikely to succeed. “It requires bicameral action and agreement between the Congress and the president to change the law,” said principal Chris Cox, former chairman of the Securities and Exchange Commission. “It is therefore unlikely, even with passions running high, that a dramatic overhaul could be whisked through the system.”